China continued with its criticism of import tariffs on steel and aluminum imposed by U.S. President Donald Trump even as its commerce minister Zhong Shan said that the world economy would suffer because of its trade war with the United States.
Trump has imposed a 25 per cent import duty on steel and 10 per cent import tariff on aluminum last week. the U.S. however paved the way to include more of its allies to be exempt from the tariffs following pressures from them.
It is an open secret that China is the main target of Trump imposing the tariffs because the world steel market has been over supplied by addition of capacity in China. China has not been quite to the tariffs and as repeatedly said that if it is targeted by the trade measures by the U.S., it would severely defend its “legitimate rights and interests”.
China will not initiate a trade war because it does not want one, said Zhong while speaking on the sidelines of China’s annual session of parliament.
“There are no winners in a trade war,” Zhong said. “It will only bring disaster to China and the United States and the world.”
He however reiterated that China will resolutely protect its interests and Beijing is capable of handling any challenge.
On Friday, the metal industry of China called on the Chinese government to pursue a policy of tit-for-tat to the U.S. tariffs and impose an import tariff on U.S. coal. The mineral is very close to the election promises made by Trump and is vital to a large section of his voter base. This has been the most explicit threat by Chinese industry in reaction to the U.S. tariffs. An import duty on coal could hurt U.S. jobs in a sector that had been reeling with shortage of demand and one where Trump has promised to bring back jobs by increasing production.
With an annual import of 35 million tonnes of steel raw materials in 2017, U.S. stands out as the largest importer of steel and a large part of the of the imports (6.6 million tonnes) takes place as imports from South Korea, Japan, China and India.
Ever since Trump took charge of the Oval office, the trade relations between China and U.S. have been tense. Even though China accounts for only a small part of the steel imported into the U.S., but the country’s steel industry has managed ot drive down international prices of steel by a massive capacity expansion creating a global glut of steel.
(Adapted from TheGuardian.com)